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Nightly Business Report

News/Business. (2010) Gillian Tett, The Financial Times. New. (CC) (Stereo)

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PBS

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00:30:00

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Annapolis, MD, USA

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Comcast Cable

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Channel 78 (549 MHz)

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mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

China 13, U.s. 7, Oracle 6, United States 4, Treasury 3, Chicago 3, Dodd 2, S&p 2, Frank 2, Susie Gharib 2, Tony Bartel 2, Suzanne Pratt 2, Hogan 2, Tom Hudson 2, Geithner 2, Diane Eastabrook 2, New York 2, Darren Gersh 2, Mark Hurd 1, Tomlinson 1,
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  PBS    Nightly Business Report    News/Business.  (2010) Gillian Tett,  
   The Financial Times. New. (CC) (Stereo)  

    September 16, 2010
    7:00 - 7:30pm EDT  

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>> tom: treasury secretary geithner steps up pressure on china. >> we are examining the important question of what mix of tools, those available to the united states and what multilateral approaches might help encourage the chinese authorities to move more quickly. >> susie: but congress isn't satisfied. sound familiar? we look at the latest political dance around our biggest trading partner. you're watching "nightly business report" for thursday, september 16. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
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this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for watching. some tough criticism about china's trade policies today from the obama administration. susie, treasury secretary geithner told congress china is moving too slowly to raise the value of its currency. >> susie: tom, trade experts say that gives chinese exporters an unfair advantage and doesn't help the u.s. economic recovery.
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but geithner said he was not prepared to label china a "currency manipulator" under u.s. law. >> tom: that reluctance was all too familiar to members of congress, and they grilled geithner with hostile questions. darren gersh reports. >> reporter: even the senators grilling the treasury secretary today admit hearings on china's overvalued currency have become something of a ritual over the years. it begins with the expression of outrage from senators like new york's charles schumer. >> at a time when the u.s. economy is trying to pick itself up off the ground, china's currency manipulation is like a boot to the throat of our recovery. and this administration refuses to try to take that boot off our neck. >> reporter: then, it's the treasury secretary's turn to share concern, to offer tougher rhetoric, and then to explain that declaring china a currency manipulator under the current law will do little more than require more consultations, as
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treasury secretary geithner explained today. >> wishing something does not make it so, and issuing a report that requires me to go consult changes nothing. >> reporter: in between, there is a discussion of china's complex economic relationship with the united states. with hundreds of millions of consumers and growing fast, china is a huge opportunity. >> we export a lot to china. our exports are growing very rapidly. they've been growing much more rapidly than our imports from china over the last five years or so. that has huge benefits to the united states and to american workers. >> reporter: but china has kept its currency largely fixed for two years, which has the effect of putting chinese exports on sale. that, says alabama republican richard shelby, has cost many american workers their jobs. >> the american public, mr. secretary, is tired of hearing about the sophisticated nuances of international diplomacy. they want the administration to fulfill its promise of balanced international trade.
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they want us to overcome our addiction to chinese-funded debt. >> reporter: so what happens next? the administration is promising to press china on its currency when it meets with other world leaders in korea in november. and then there is the usual talk in congress of passing a tougher law. >> i think the only way that we'll get them to feel we're more serious is if we start moving legislation in this congress that has more teeth. >> reporter: the administration did suggest today that it wants to see china allow it's currency to move about 20% higher against the dollar. since june, the change has been just 1.5%. darren gersh, "nightly business report," washington. >> susie: meanwhile, president obama was talking up the need for american businesses to export more. meeting with his export council, the president renewed his pledge to double the nation's exports over the next five years. he says boosting them means more american jobs. >> the world wants to buy goods and services made in the united
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states, and our workers are ready to produce them. >> susie: but are they? diane eastabrook talked to companies at a manufacturing trade show in chicago today. many executives told her they're having trouble finding skilled workers. >> reporter: you wouldn't find this on your father's factory floor-- a robotic arm that not only retrieves parts, but can recognize one piece from another. at the international manufacturing technology show in chicago this week, 1,200 firms from 80 countries are showing how new machines are making factories cleaner, more efficient, and more productive. "it's revolutionary," says show vice president peter eelman. >> it is evolution that requires a constant paying attention and constant re-education. >> reporter: and that presents a dilemma for many manufacturers. while the u.s. has shed more than five and half million factory jobs in the last decade, the government says there are now more than 200,000 job openings at plants around the country. mark tomlinson from the society
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of manufacturing engineers says a lot of factories can't fill those jobs with laid-off workers because those workers don't have the right skills. >> they need an additional set of skills to run these machines, maintain these machines, and process these machines. >> reporter: robots have been welding and painting vehicles in auto plants for years. soon, new robots like this one will do assembly work like seat installation. erik nieves from yaskawa america says workers who are now doing that job will need to learn how to program and troubleshoot the robots. >> when the seat doesn't go in the right way, or a blue seat goes where a green seat is supposed to go, "what happened here?" "so, how do i think through this process? what one was supposed to be at zero, or what switch was supposed to be turned on that ended up staying turned off? how do i fix that?" >> reporter: many companies are now retraining workers themselves or with help from outside vendors. >> so students log in 24 hours a day, seven days a week. >> reporter: tooling u offers
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training online and on the factory floor. chad schron demonstrates how students log on to learn a new piece of equipment. >> we have real machine tool simulators that will simulate the machines that you see here. if i were to hit the wrong button here, it would pop up the error message and tell me i hit the wrong button. i can now try again, or i can hit "show me" and it will show me the button i should have hit on the machine. >> reporter: the society of manufacturing engineers thinks the government needs to spend more money retraining workers downsized from factory jobs, while others say the effort needs to begin earlier. organizers of this show say junior highs and high schools need to get kids interested in manufacturing early, and offer the right kinds of classes that will prepare them for jobs on the plant floor. diane eastabrook, "nightly business report," chicago. >> tom: here are the stories in tonight's "n.b.r. newswheel." some better-than-expected economic news helped the blue chips move slightly higher. the dow added 22 points, the nasdaq gained nearly two points,
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and the s&p 500 was off a fraction. volume held steady on the big board, and dropped slightly on the nasdaq, dipping below two billion shares. jobless claims dropped modestly in the last week. they were down 3,000 to 450,000. producer prices, which track inflation at the wholesale level, rose slightly, up just four-tenths of a percent. that was in line with forecasts. the senate has passed a $30 billion bill to boost lending to small businesses, helping them expand. the measure now heads to the house, which is expected to pass it and send it to the president. and one in seven americans lived in poverty last year; that works out to 44 million people. the census bureau says the poverty rate hit 14.3% in 2009 due to the recession. >> that's what we are all about- - gaming. still ahead, playing xbox one on >> tom: still ahead, playing xbox one on one with tony bartel, president of the world's largest video game retailer, gamestop.
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we talk about going digital and how holiday sales are shaping up. >> susie: as we reported, it was another good day for stocks on wall street. the dow has finished higher in ten out of the last 12 trading sessions. the recent rally in stocks is notable because it's september, typically the worst month of the year for the stock market. suzanne pratt takes a look at just what might be different this year. >> reporter: so much for september being a sour stretch for stocks. so far this month, all of the major averages are up strongly, defying expectations and history on wall street. floor trader art cashin had predicted a down month for stocks. but he says the economic winds have shifted, ever so slightly. >> what we've seen in september, rather than the usual nail- biting-- seasonal nail-biting, anyway-- is kind of un-pricing the double dip. so the fears that had moved the market down on a double dip started to ease back out.
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>> reporter: some attribute the recent rally to the simple fact that stocks were undervalued after a rough summer. others say investors are realizing third-quarter corporate profits are likely to be strong. according to thomson reuters, eight out of ten sectors of the market are expected to post positive profit growth when reporting starts in october. still, market strategist art hogan says he's not sure investor sentiment has shifted, at least not yet. >> i think if we walked around this room now and asked 100 people, probably 85 of them would tell us the next move is down, not up. sentiment is very bearish. i think that people believe we're going to break out of this trading range and probably break out lower, not higher. >> reporter: hogan also says, if the economic news improves on a more steady basis, that would be a game changer for sentiment. >> if we were to see that, and let's say the s&p 500 were to close above 1,130-- there's a lot of money on the sideline that could move this market higher. i think we could close the yearend between 1,150 and 1,200,
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which would be a great way to wind things up on a very difficult year. >> reporter: one extra tidbit that traders say is worrisome is the low volume we've been experiencing in september, down about 25% from last year. they say it shows a serious lack of conviction in the current rally. suzanne pratt, "nightly business report," new york. >> tom a lot of buzz about
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oracle after the market closed today. the stock was up sharply. it looked like that could be the talk tomorrow as well. >> tom: yeah, there is a lot going on in technology. seems like we are kind of outside of earning season but a couple of biggies did report after the closing including oracle. let's get you updated in tonight's market focus. stocks marked time today with none of the ten biggest sectors making more than a 1% move up or down. information technology led the gainers. the nasdaq exchange traded fund eked out a small gain, but enough to push it to its highest close since may. oracle turned in its latest quarter after the close, easily beating estimates with strong software and hardware sales. profits were a nickel better than expectations, even beating the company's own guidance from june. software sales were up across the globe, and its hardware business benefited from the purchase of sun-microsystems.
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oracle's newly hired co- president, mark hurd-- the former c.e.o. of hewlett packard-- touted oracle's $4 billion research and development plans. senior analyst at janney sasa zorovic expects hurd will be front and center. >> he is going to have a high profile at the company, with the title of president, being sort of the command, secretary level level together, i think one of his particular focuses going forward will be furthering proving the son's business. >> now the >> tom: oracle stock came into the earnings call, down 1.5% today. after the numbers, the stock jumped 4%. if that holds until tomorrow, it would hit its highest price since april. another one worth watching is research in motion. its quarter came in more than a dime above estimates. it shipped more than 12 million devices during the quarter. 4.5 million new customers signed up for its blackberry smartphones, which now have more than 50 million subscribers.
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shares of rimm have been sinking over competition from the iphone and google's android system, especially. the stock was up 2% before tonight's news, and added another 7% after the close. one other bright spot in tech-- apple rose more than 2% on strong volume to a new all-time high. its ipad goes on sale tomorrow in china and latin america. transportation giant fedex helped set the tone today with disappointing earnings and a mixed outlook. fedex missed estimates by a penny. the guidance for the current quarter came in lighter than anticipated. but it raised its full year forecast. the stock dropped almost 4% on the sour guidance for this quarter. the company will restructure its u.s. freight business and cut 1,700 jobs. that announcement helped boost some competing less-than- truckload carriers. arkansas best, old dominion freight line, and con-way each fought against a weak transportation sector to see small rallies on the possibility of future business. speaking of getting around, ford
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motor was very active, adding almost 5%. investment firm barclays upgraded the stock, saying even in a slower economy, it's confident in ford's earnings power. finally, another disappointment in the three-way race to get a new obesity drug on the market. a f.d.a. advisory panel rejected arena pharmaceutical's treatment over safety concerns. arena stock was halted during the regular session, but fell 40% after hours to below $2.30 per share after the rejection. the two others hoping for approval: orexigen rocketed 38%. it's drug goes up for approval in january. vivus' medicine has already been turned down. its stock was off 1%. and that's tonight's market focus.
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>> tom: the christmas video game selling season got underway this week. in one day, microsoft's latest version of "halo" did $200 million in sales, some at gamestop retail stores. we spoke with gamestop's president tony bartel about the store's holiday outlook, including its new push this year into digital downloads. >> definitely we see this as fully incremental. that we've never done this before. so it's a new program that we rolled out. and again what we saw when we rolled this out is we saw a triplinging of the attach rate of digital content. which manys that when there is a game available that has digital content on it, if we don't have this and people just have to use points to go in and find it in xbox live and pay for it that way,
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we see that there is a much smallary attach rate. whereas when we point it out and our associates are able to sell it with a lot of enthusiasm, they've probably played a lot of these, we see a tripling of that rate. >> while gamestop ramps up its digital business the sale of new and used games make a third of the sales and he optimistic for the holidays. >> a key barometer of any game are coming into that game how are reservations ramping up. what we saw with halo reach was a tremendous ramp as we got closer. the buzz was starting to bill and a tremendous ramp in reservations. it has really given use lot of confidence as we go into the holiday season with all of these great games that are taking place. >> tom: the company was confident enough to announce a $300 million stock buyback plan yesterday helping the stock rally 4% today. still gamestop shares are down 25% over the past year. >> as we have gone out and looked at our three-year strategic plan, what we see is we have sufficient cash flow to not only continue to grow in the brick and mortar space at a judicious pace, a
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measured pace. second we have enough money to go out and invest in those digital acquisitions that we need to make in order to be a major player in the digital gaming space as well. and third, as we looked at it, we also saw that we had cash flow left over that we can return to the shareholders on a very consistent bases is. >> should we play some games. >> yeah. >> are you a tiger woods golf fan. >> i will be no good. >> good, i might win. >> let's go see if we can play some tiger woods. >> right in the hole. >> wow. >> excellent. >> that was beautiful. >> right in the hole, the double doingy. >> 12 feet out, very good. >> you got the whole -- >> very good. >> tom: but so, you know, an xbox sports game versus halo, versus, i mean clearly some of the child games that are out there. but what is a gamer look like to you? >> the basic, the core gamer or the heavy, what we call a heavy user and that represents the people who come in here and buy the brunt of the games over half of the games t is a small
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proportion of our audience, they are generally average age of a game certificate around 30 years old. right now in the whole gaming community, you've got about almost 50% female. now obviously in the sports games and the first person shooters that we've looked at today, those will definitely skew male. if you take a slice of the gaming population all the way from core gamer to mom who likes to play on farmville, we see all of those people cominging into our space. in fact, what we know is that the more ways that they interact with gaming, the more they spend on gaming overall. so if they are playing on social games and playing on an xbox iii 60 console or wii we know overall they spend more money on gaming. >> gamestop is use in-store kiosk to bridge the gam between the virtual gaming world and its physical stores and selling downloadable content. >> what we plan on doing is using these stores to really help drive our digital efforts. we see a half a billion customers coming in each and every year through all of our 6500 stores throughout
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the world this that is a great footprint and a great opportunity to let these people know about all of the great content that is out there. one of the things that about the digital world is that discover ability is really difficult on some of these great products. and so what we want to do is use our stores, use our expertise which is the assisted sell and knowledge and quite honestly an incredible passion for gaming. we want to use that and use our associates to help drive us into the digital space. >> among the new titles he hopes will drive sales a familiar name to those older gamers, a new conkey kong game is due out before thanksgiving. >> susie: here's what we're watching for tomorrow: the consumer price index from august is released. our "market monitor" guest is elaine garzarelli, president of garzarelli capital. also tomorrow, household products tarn-x and c.l.r. are well-known brands. but did you know they're made by a small family business? we'll introduce you to the people behind jelmar in our "all
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in the family" series. mortgage rates inched higher for a second week in a row. freddie mac says the average rate on a 30-year fixed rate mortgage was 4.37%. while that's just off the historic low set two weeks ago, cheap borrowing costs haven't meant a boost in home sales. economists think that's because people are worried about job security and the bumpy recovery. >> tom: meanwhile, lenders took back more homes in august than any month since the mortgage crisis began. real estate data firm realty trac says there were over 95,000 foreclosures in august. that's up 25% from year-ago levels. banks are reluctant to flood the market with those properties, because that would depress prices. fewer than a third of homes repossessed by lenders are now for sale.
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>> susie: if you think the fights about reforming the nation's financial system are over, you might be mistaken. here's commentator gillian tett, u.s. managing editor at "the financial times." >> right now, many americans might think that the battle over banking reform is pretty much over. after all, in july, the
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president signed the so-called dodd-frank bill, which was supposed to set a historic new track for the banks. but the dirty secret of the banking world is it's not game- over yet. some of the most important fights are really now only starting. and this time, their taking place in places that most politicians, investors, or voters don't really see. that's partly because important negotiations have just taken place in the swiss town of basel about an international bank accord that covers issues like bank capital. and although these haven't got much attention in the u.s., in fact, they could end up ironically having even more impact on the banks than dodd- frank. and there's still a lot of talking that needs to happen about how they will be applied. but secondly, regulators still have to turn that dodd-frank bill into rules. now, dozens of committees linked to the s.e.c. and c.f.t.c. are starting to do just that right now. but the process is pretty technical, and it doesn't occur in the glare of the public eye. it's crucial, though.
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take one example-- though dodd- frank will put "standardized" derivatives on a central platform, no one know how "standardized" will be defined, and so no one knows how many contracts will be captured. that matters a lot for bank profits. there's a lot to play for still. no wonder bank lobbyists say they have never been busier. i'm gillian tett. >> susie: finally, some college students in pennsylvania are in the middle of what probably feels like a really long week. that's because the harrisburg university of science and technology has blacked out all social media for the entire week. students and staff at the small school can't use facebook, twitter, or any similar sites while on campus. the blackout isn't a punishment; instead, it's being used as a way to evaluate the role of social media in people's lives. so, tom, could you go a week without tweeting? >> a week and no tweets, susie, i don't know. forced into face-to-face human interaction?
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i think we would all enjoy that, certainly. >> susie: that would be a good thing not withdrawal symptoms for you or me. >> tom: not at all. >> susie: that's "nightly business report" for thursday, september 16. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by:
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this program was made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >> more information about investing is available in: "nightly business report's" video "how wall street works". to order this dvd, call 1-800- play-pbs or visit online at shoppbs.org. >> be more. pbs.
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